Over twenty years ago I was fortunate enough to have been selected to be CEO of the generating company, Stanwell Corporation. In one of our early strategic planning sessions we determined to focus on renewable energy projects. In following years we commissioned wind, mini-hydro and biofuel projects. It seemed to us that it was responsible to move away from fossil fuel generation and embrace more renewable options. We were however content to continue to operate Stanwell Power Station which was at that time Australia’s newest coal fired power station and our largest asset.
We felt, however, that the move to renewables was a long-term strategy and part of the transitioning process would involve initially an increase in gas-fired generation, because closed cycle gas turbines emitted far less CO2 per MWhr produced than coal-fired plant but provided reliable, despatchable generation.
We were also mindful of the fact that a rush to renewables that abandoned traditional base-load technologies put security of supply at risk.
In those days electricity supply systems were designed by power engineers that tried to balance the economics of supply with the risks of maintaining security of supply. But before very long, those considerations were subverted by Greens advocates and opportunistic politicians intent on virtue signalling who have little understanding of the underlying economics of power generation and distribution, nor of the impacts on the reliability of supply.
As part of our push to champion renewable energy we lobbied the Federal Government to mandate a renewable energy target. The Government subsequently mandated a 4% renewable energy target. That target in the subsequent twenty years has grown alarmingly to 20% with the Greens and the Labor Party determined to drive it much higher in the coming decade. I deliberately say “alarmingly” because most of these people have little understanding of the impacts on the electricity network which cannot sustain such rapid increases in renewable energy without large cost increases and reductions in system reliability.
Now it pays to spend a little time to try to understand this rush for renewables. As most would know it is a response to concerns about global warming. There is a body of opinion (although not universally accepted) that increasing levels of greenhouse gases in the earth’s atmosphere are causing the earth’s surface to heat up. One of the greenhouse gases responsible for trapping in the atmosphere radiant energy from the sun is CO2. CO2 is a very minor component of the earth’s atmosphere but its concentration has been increasing for a couple of centuries due to industrial activity. (At other times in the earth’s history CO 2 concentrations have varied significantly due to natural causes, sometimes being considerably higher than today’s levels. Interesting, the geological evidence would suggest that in the past warming has preceded rising CO2 levels!) Other greenhouse gases, such as water vapour and methane, also impact on global warming and are present in greater concentrations.
If global warming is largely driven by increasing CO2 emissions (and there are many who will argue it is not) we are faced with the dilemma that the only solution is to orchestrate a global response. We can’t quarantine our little part of the atmosphere and take action to reduce CO2 emissions and expect any results of consequence. Unless there is a concerted effort across the globe, our efforts will have minimal effect. Australia’s contribution to global CO2 emissions is a mere 1.3%. The government’s chief scientist, Alan Finkel, admitted in June 2017 that if Australia stopped all its CO2 emissions there would be no discernible impact on global climate.
Australia is one of the few countries likely to meet its emissions targets pledged at the Paris Agreement. Last year, for example, Australia was the world’s fifth biggest investor in renewable energy and whilst our CO2 emissions increased by 0.7% the carbon intensity of the economy overall has been in decline.
But despite our efforts to curtail emissions, they are still increasing. A recent report by global energy giant BP, indicates that average greenhouse emissions around the globe are rising at twice the rate of Australia. By and large the commissioning of renewable energy projects globally could not keep pace with the growing demand for energy in China and India in particular, much of which is being met by the commissioning of coal fired power stations. The report also made it clear that without the rapid development of shale gas in the US and the export of LNG to Asia (most notably from Australia) global greenhouse emissions would be even higher. The increase in global greenhouse emissions last year of 600 million tonnes, is greater than Australia’s total output.
So if, indeed, climate change (global warming, climate instability, climate emergency or whatever is the accepted nomenclature this year) is dependent on CO2 emissions, we are nowhere near doing enough to avoid it. Nor are we likely to when the globe’s biggest emitters, China, India and the US refuse to play the game. (And it has really become a political correctness game. Witness the fact that Australia’s delegation to the recent summit in Bonn was requested to explain the impacts of its emission reduction efforts on gender politics and indigenous welfare!)
Now the evidence around the world suggests that despite propaganda from Green groups to the contrary, coal and gas still dominate in electricity generation and are likely to for many decades to come. This is the case for two prime reasons:
- Economics. By far the majority of renewable energy projects are not viable without government subsidies.
- System Stability. The intermittent nature of generation from most renewable generators means that they can’t successfully operate without being propped up by despatchable generation.
Consequently, despite the hype of the renewable energy enthusiasts, their preferred technologies, wind and solar, deliver only about 1% of global energy. The International Energy Agency estimates that even by 2040 these technologies will deliver only 4% of global energy.
More than this, when evaluating renewable technologies, environmentalists conveniently neglect to take into account the physical footprint of renewable energy. The amount of land required per unit of electricity generated is far higher for renewable energy projects than for fossil-fuelled projects. And they generally avoid mentioning the high carbon emissions involved in the manufacture of plant and site establishment of renewables. There are also issues of disposal of these technologies at the end of their useful life which is much shorter than that of conventional coal and gas plant.
Danish researcher, Bjorn Lomborg likes to quote former US Vice President Al Gore’s chief scientific adviser, Jim Hansen. Back in 1998 Hansen declared:
Suggesting that renewables will let us phase rapidly off fossil fuels in the United States, China, India or the world as a whole is almost the equivalent of believing in the Easter Bunny and Tooth Fairy.
And of course we are faced here with a difficult moral dilemma.
Climate change catastrophists are warning us that unless we act to reduce global warming, much of the world will suffer irreparable damage and the associated elevated temperatures, rising sea-levels and extreme weather events will cause devastation around the globe.
On the other hand third world countries are desperately trying to increase their energy consumption because first world countries have demonstrated the correlation between energy consumption and wealth, better health outcomes including increased longevity, increased food production and many other indicators of lifestyle improvement. They (rightfully in my mind) complain that advanced economies are preventing their access to a better quality of life by restricting their options to access cheap energy. When the only energy you can access is burning animal dung or wood from the local environment there are inevitable health consequences and environmental impacts. We know that villagers in developing countries can improve their lots immensely just by having access to electric power for cooking and lighting. There are still millions of people who don’t have access to what we would describe in our society as basic necessities.
(If we take Africa, for example, the International Energy Agency states that more than 75% of people in Madagascar, Ethiopia, Somalia, South Sudan, Sudan, Kenya, Tanzania, Uganda, Rwanda, Burundi,, Congo, Central Africa Republic, Chad, Niger, Burkino Faso, Liberia, Sierra Leone, Guinea Bissau, Guinea and Mauritania have no electricity.)
The rapid transitioning to renewables is indeed a two-edged sword. For energy intensive, first world countries, it is prohibitively expensive diverting to energy generation resources that would have brought greater benefits if applied elsewhere in the economy. For third world countries it curtails their opportunities to pursue economic development by ramping up their electricity costs.
Politicians by and large seem oblivious to this. For example, in its response to the Paris Agreement, New Zealand has pledged to reduce its CO2 emissions to zero by 2050. Now this is a politically easy pledge for a politician to make because it will not be the present political incumbents that will have to deal with the outcomes. After making this pledge the NZ Government commissioned a study to determine the costs to its economy of making such a pledge. (This is typical in politics when virtue signalling is more important than actually doing anything. Surely the economic study should have been completed before the government made its pledge!) The study, according to Bjørn Lomborg of the Copenhagen Consensus Centre (see below), found that attaining this outcome in the most cost-effective way (which is surely a fantasy) “would cost more than last year’s entire national budget on social security, welfare, health, education, police, courts, defence, environment and every other part of government combined. Each and every year.”
Even in industrialised countries like Australia, the burden of high electricity costs fall unfairly on the working class, pensioners and the poor. More wealthy electricity consumers are able to take advantage of government subsidies, for example, to install rooftop solar panels and thus reduce their electricity bills. But those subsidies serve to increase electricity tariffs and poorer people pay for this in their electricity bills. Higher electricity prices make energy intensive industries less competitive reducing job opportunities for working class people. It is not surprising then that the chief advocates of renewable energy are inner city professional people who are less affected by the hike in electricity prices and who have anyway the financial capacity to cope with rising prices.
But overall, whether in developing or developed countries, it is the poor that bear the brunt of increased electricity prices. For example in Great Britain it is estimated that up to 24,000 elderly people die from illness and hypothermia each winter because they cannot afford proper heating.
In rural Australia many elderly people in colder areas who burnt wood to keep warm in winter have had this source of heating denied by environmental legislation and can’t afford to replace it with electric heating. Some news reports also suggest that some elderly Australians have been overwhelmed by the propaganda of climate activists such that they don’t turn on their heaters in fear of the CO2 they might cause to be generated as a result. Consequently they spend their winters with their houses shut up, with multiple layers of clothing and often in bed to avoid the cold. Surely we need to provide such people with more comfort without guilt!
The industrial world was largely rescued from poverty by access to cheap energy derived from fossil-fuels. Climate change alarmists are not only threatening our standard of living by vetoing fossil fuels they are impeding the development of the world’s poorer countries through the same means. What’s more when environmentalists thwart the economic development of poor countries they do their cause great harm because environmental degradation tends to be much worse in poor countries than in developed nations.
(The International Energy Agency has shown in the past that there is a near perfect correlation between electricity generation from coal and gross domestic product.)
The Copenhagen Consensus Centre is a non-profit think tank, founded and headed by Bjørn Lomborg. The Centre organises the Copenhagen Consensus, a conference of prominent economists held every four years, where potential solutions to global issues are examined and prioritized using cost-benefit analysis. The Consensus has shown that rather than promoting existing renewable technologies the world would be better placed by ploughing more money into the research and development of renewable technologies. It envisages that this would see a large reduction in the cost of renewable energy such that renewable energy can be competitive with fossil-fuelled generation without recourse to subsidies. In this way less carbon intensive energy generation would become cheaper allowing the retention of energy-intensive industries in developed countries and facilitating the delivery of affordable energy to developing countries.
Unfortunately in Australia the debate about the choice of generation technologies seems to have been constrained to a choice between renewables and fossil-fuelled technologies.
As I indicated at the outset of this essay, this has been driven to a simplistic either/or dichotomy when the more rational trajectory would seek to encompass both these technologies. Any fast transition to renewables will undoubtedly be costly and with little impact on global warming. The transition needs to be carefully managed if it is not to be hugely disruptive.
But to our great disadvantage another technology has been excluded altogether – nuclear!
Australia has taken a very reactionary stance towards nuclear energy. It is the only G20 country without nuclear energy even though Australia’s uranium deposits are among the largest in the world and we happily export uranium around the world as fuel for nuclear generation. Half the world’s population lives in countries that have access to nuclear power. Do we believe that our scientists, engineers and technicians are less capable of managing nuclear technology than those of other developed countries? I, for one, don’t think so.
Graham Lloyd, the environment editor of The Australian writes:
The view globally is that nuclear power is the best emissions-free hedge against a failure of renewables to satisfy more than about one third of a nation’s energy requirements.
I don’t want to pursue this theme further in this essay except to say Australia would be foolish not to allow nuclear power to become a part of its energy mix. It is CO2 emissions free, reliable and consequently despatchable and would complement renewables generation in reducing carbon intensity whilst helping maintain system security.
In following this confusing debate for almost thirty years now, I would like to summarise the conclusions I have come to.
- The reaction to perceived global warming as though it was due to increasing, anthropogenically produced CO2 levels is prohibitively expensive and before we commit to such expense we must be sure that we have diagnosed the problem correctly and that this is the best way to spend our money.
- We need to pay due regard to the fact that heating and cooling of the earth have occurred many times in the earth’s long history. Similarly geological records suggest that CO2 concentrations have also varied greatly in that long history.
- We know that perturbations in the earth’s orbit around the sun have significant impacts on the earth’s temperature. A recent scientific paper published by Valentine Zharkova predicts that even without any impacts of anthropogenic warming, the earth’s temperature will probably rise by 2.5°C in the next 600 years because of this effect. Recent research by universities in Finland and Japan indicate that variations in the earth’s magnetic field which in turn effects the formation of low level cloud have far more impact on global warming than CO2 All in all, regardless of the frequently heard claim the “the science is settled”, it seems to me we are a long way from having reliable models of the dynamics of climate.
- Geological evidence shows that the earth’s temperature has varied by as much as 10°C over the eons. Even in relatively recent times (5,000 to 9,000 years ago) temperatures were higher by at least 2°
- There is considerable evidence available to question whether we do, in fact have a “climate crisis” and even if we do that it is driven by man-made CO2
- Moreover, even if we are facing global warming that is CO2 induced, current commitments to CO2 come nowhere near reducing CO2 emissions to the point that a significant reduction can be obtained. This is particularly the case while the world’s biggest emitters, China, India and the USA are not participating in the effort.
- Australia’s efforts are among the most significant of the participants but have come at the cost of large increases in energy prices which are threatening our economic development and standard of living. We would be better served to continue to increase our renewable energy but at a slower pace, utilising a range of technologies to reduce the carbon intensity of our electricity generation. This would ensure electricity prices did not escalate so quickly whilst maintaining our security of supply.
- We should recognise that there is a place for coal-fired generation for many decades to come. We should also follow the lead of most other industrialised countries and look at the options that nuclear technology can provide.
- We should also heed the recommendations of the Copenhagen Consensus centre and look at increasing our investment in R&D of renewable energy. We should also, as an insurance against global warming if it does eventuate, investigate adaptation strategies.
- Human beings have lived in colder times and in warmer times than exist at present. Scientists tell us that global cooling is probably more difficult to adapt to than global warming.
- Whilst CO2 is virtually a trace element in the earth’s atmosphere it enhances plant growth. There is some evidence to suggest that current elevated CO2 levels are causing more greening of the globe. This causes additional carbon to be sequestered in plant matter helping to reduce atmospheric CO2, which constitutes something of a negative feedback loop for CO2.
In essence if the climate alarmists are right there is little likelihood that the world can reduce its CO2 emissions significantly and fast enough to have much impact on global warming. Australia alone can have no worthwhile impact. Our rush to renewables is raising our energy prices unduly and threatening our economy.
I believe it is more prudent to hasten slowly with the commissioning of new renewable generation. Accordingly I think it would be wise to remove the government subsidies in favour of renewable energy and let the market determine (without interference) the mix of generation technologies. The money spent in propping up uneconomic renewable projects would be better spent in research to develop more cost effective renewable technologies and to develop adaptation strategies if significant global warming eventuates.
In addition Australia needs to remove its blinkers with respect to nuclear generation and objectively assess its role in the Australian context.
Finally, we should consider countering the alarmist propaganda and its effects on our young people. The climate warriors have succeeded in convincing most of our youth that a climate Armageddon is virtually assured. The angst that this is causing is similar to that of my generation’s fear of nuclear annihilation. A more measured debate is needed. (I am reminded of the supposed Y2K crisis!) I am not suggesting that we should ignore the possibility of global warming but counsel that a precipitate response might do us more harm than good.